FINAL
Remarks* of Deputy Attorney General
Larry D. Thompson
to the Citizens' Crime Commission
New York, New York
July 25, 2002

INTRODUCTION

Good evening and thank you for the invitation
to address this esteemed group about some of the law enforcement issues that
are front and center in my job as Deputy Attorney General. Let me say first
of all, that it is always a pleasure to come up to New York - a city that
is so much in our thoughts these days. Your city bears eloquent and painful
witness to both the horrific terrorist attacks of last year and the stock
markets' dizzying gyrations of this year. And my two and only sons have lived
here for a couple of years. They were here on 9-11. One works downtown, one
attends NYU and my wife and I shared the anxiety of many New Yorkers following
the attack. And it is the Justice Department's role in the war on terrorism
and our attack on Corporate Fraud that I would like to speak about this evening.

CONCERNS / BALANCED MEASURES

Americans before us have gone to war many times
- and spent untold blood and treasure to secure the liberties that we hold
dear.

But we live in historic times. We are the first
generation of Americans to confront the mass murder of civilians by a foreign
enemy on our own soil.

September 11, 2001 was not the beginning of
America's war against terrorism, but the attacks that day in New York and
Washington did galvanize the country and bring into sharp focus our goals.

We are fighting a tenacious and devious enemy
who seeks to use our own freedoms against us. That fact has had far-reaching
consequences for the law enforcement role in this war. We have had to use
every weapon in our legal arsenal to disrupt and prevent future terrorist
attacks - including the aggressive but still appropriate use of detention,
surveillance and legal processes such as material witness warrants.

As a public official - and as an attorney who,
for many years, represented criminal defendants - I share the concern that
the struggle against terrorism not change the essential character of our nation.
But I want to assure you that, in my opinion, none of these steps that we
at the Justice Department are taking threatens our Constitution. All of the
measures that we are bringing to bear are arrived at openly, in the sunlight
of public attention, and are subject to judicial review.

And, It is our very open, democratic and just
society - whose hallmark is our concern for civil rights - that has made us
the terrorists' target.

Our freedoms are the envy of the world and
the perennial winner in the global marketplace of values and ideas.

It is precisely because the terrorists' ideology
cannot compete in the open marketplace that they have turned to violence and
horror. They attempt to achieve through mass murder what they will never be
able to accomplish in a free exchange of ideas: to subvert our freedoms, freedoms
for which millions of Americans have strained and sacrificed.

We are certainly not the first nation to be
assailed by terrorists bent on its destruction. Others who have responded
to this challenge can help guide us to strike the right balance among competing
liberty and security concerns.1 Although
Israel has been the victim of repeated terrorist assaults, the Israeli Supreme
Court has prohibited the use of "moderate physical pressure" by its domestic
investigators. In doing so, the Israeli court recognized a principal that
applies equally to our own struggle: "This is the destiny of democracy, as
not all means are acceptable to it, and not all practices employed by its
enemies are open before it. Although a democracy must often fight with one
hand tied behind its back, it nonetheless has the upper hand. Preserving the
Rule of Law and recognition of an individual's liberty constitutes an important
component in its understanding of security. At the end of the day, they strengthen
its spirit and [add to] its strength and allow it to overcome its difficulties."

This same reverence for civil rights inspired
the Attorney General immediately after the terrorist attacks to challenge
all of us in the Justice Department to "think outside the box" in fighting
terrorism, but caution us: "Don't think outside the Constitution."

ENEMY COMBATANTS

We are rich nation that has enjoyed many luxuries,
not the least of which has been the peace that has prevailed within our borders
for four generations even as the combat flared and smoldered abroad. In this
current war, that has brought the fighting and dying home to this city, we
have had to think carefully through how to handle the treatment of captured
enemy combatants - and to think especially hard about U.S. citizens who have
taken up arms against our cause or against their own country.

It is a universal principle of warfare that
enemy combatants may be detained outside the criminal justice system for the
duration of hostilities. In every war since the founding of the Republic,
the United States has detained without legal recourse captured enemy combatants
- sometimes including U.S. citizens fighting for the enemy.

We need to detain enemy combatants because
(1) it would be suicidal not to - they could otherwise resume their belligerent
acts - and (2) in order to gather information about the enemy and his plans.
Such detention is entirely distinct from criminal punishment. It is a basic
military imperative and an integral part of the President's constitutional
duty to defend the United States.

CORPORATE FRAUD

Of course, as you are acutely aware in the
center of the financial world, attack from foreign terrorists is not the only
threat to the health of the Republic. Our financial markets have been shaken
by a wave of criminal conduct at the highest levels in American corporations.
While this conduct is shocking, it is not without precedent and the Administration
is taking swift and certain action to punish the wrongdoers and restore confidence
to investors.

Two weeks ago, the President appointed me Chairman
of the Corporate Fraud Task Force, an interagency group that represents the
vast law enforcement resources of the Justice Department, the S.E.C., the
Treasury Department and others. We have begun the process of coordinating
and overseeing these efforts to root out fraud in corporate boardrooms and
executive suites, and to put the wrongdoers in prison.

There is a significant category of wrongdoers
who cannot be imprisoned, but are nonetheless crucial targets of our efforts.
Although it should be done sparingly, we should never hesitate to prosecute
corporations themselves when the circumstances warrant it.

In making the decision to seek an indictment
against a corporation we consider the company's history of wrongdoing, its
response to regulatory actions, its reaction to the criminal conduct committed
by its employees, the level within the corporation at which the crimes were
committed or condoned, and the pervasiveness of the criminal behavior within
the organization.

I now want to speak about a few of the reasons
why I believe that it is imperative to continue to prosecute business organizations
where appropriate:

First, corporations are economic and cultural
facts in our society. Employees act on the corporation's behalf and take on
the corporation's identity. Large corporations, develop their own methods
and culture that guide employees' thoughts and actions. That culture is a
web of attitudes and practices that tends to replicate and perpetuate itself
beyond the tenure of any individual manager. That culture may instill respect
for the law or breed contempt and malfeasance. The organization itself must
be held accountable for the culture and the conduct it promotes. Without this
tool, the public would have no adequate deterrent to corporate criminal conduct
because the culture that condoned, or at least acquiesced in, that behavior
would be beyond the criminal law's power to correct. Only by clearly preserving
the possibility of prosecuting the corporation itself can we ensure systemic
reform.

Second, the corporations that are prosecuted
have generally transgressed before and proven themselves immune to civil persuasion.
The Justice Department has long recognized the principle that an employee's
criminal wrongdoing does not mean that the employing organization should automatically
be charged with a crime, especially where it would not serve a substantial
federal interest to prosecute and adequate non-criminal alternatives exist.
In reality, the corporations that are criminally prosecuted - that is, for
which the enforcement authorities choose to subject their case to the criminal
standard of proof beyond a reasonable doubt - are ones in which the company
has flagrantly crossed the line in one or more ways that demonstrate that
the guilty mind of individual actors was borne out of the guilty culture of
the organization itself.

Third, civil regulatory regimes may do a good
job sorting out the normal range of problems in an industry, but it takes
criminal sanctions to deal with extreme cases of serious or repeated wrongdoing.
Traditional civil remedies have proven ineffective against recidivist companies
that are the primary targets of criminal prosecution. Civil sanctions simply
do not have the power of criminal penalties to concentrate the corporate mind
and change corporate culture. Large business organizations, particularly public
companies that are already regulated in myriad ways, sometimes have the disappointing
tendency to view civil sanctions as merely the "cost of doing business" -
a cost that can be passed on to customers and shareholders without lingering
effect in the management suite and the board room. Civil sanctions are particularly
impotent in combating crimes against society at large, such as regulatory
reporting violations or obstruction of justice, that may undermine the legal
system, but do not create easily quantifiable harm. The severe potential collateral
consequences to a corporation resulting from a criminal conviction is sometime
the best and most effective way to punish a corporation.

Without corporate criminal liability, there
would be no effective deterrent to a corporate culture that -- expressly or
tacitly -- condones criminal conduct. Instead, corporations could merely appoint
a "Vice-President in Charge of Going to Jail" who would serve as a whipping
boy for the collective acts of the organization. It should go without saying
that the criminal law seeks to punish individuals who commit crimes. But the
criminal law wisely seeks to punish and reform the corporation that fosters
or condones its employees' criminal behavior.

When asked why he robbed banks, Willie Sutton
famously responded, "Because that's where the money is." So, too, is the money
in the corporation. In order to change corporate cultures that foster criminal
conduct, it is sometimes necessary to punish the corporation itself through
substantial fines and the collateral consequences of criminal convictions
that not only have a direct impact on the bottom line, but also spur reforms
in the way the business makes money.

I think we are on the right track at the Department
of Justice. But we will not be complacent.

As Will Rogers, the famous American philosopher,
once said, "Even if you are on the right track, if you just sit there and
do nothing, you will eventually get run over."

Thank you.

*NOTE: Mr. Thompson frequently speaks from notes and may depart from the
speech as prepared. However, he stands behind the speech as presented in written
format.

1 Israeli Supreme Court decision of
September 6, 1999 concerning the interrogation practices of the General Security
Service (also known as "Shin Bet").